U.S. tariffs explained for procurement teams (2026 guide)
How Section 232, Section 301, the forced-labor tariffs and the expired IEEPA and Section 122 duties work, how they stack, and what procurement teams should do to control landed cost.
Key takeaways
- In 2026, U.S. tariffs rest mainly on two laws: Section 232 (national security, by product) and Section 301 (unfair trade practices, by country).
- The Supreme Court struck down the IEEPA 'reciprocal' tariffs on Feb. 20, 2026; the temporary 10% Section 122 surcharge that replaced them expired July 24, 2026.
- Tariffs stack: a single import can owe MFN duty, Section 301 China duty and the forced-labor duty at once, while Section 232 goods are exempt from the forced-labor layer.
- 178 Section 301 China exclusions expire Nov. 10, 2026, restoring a duty typically of 25% on covered goods.
- Control tariff cost with accurate HTS classification, country-of-origin strategy, USMCA qualification and contract clauses that decide who pays.
In this guide
How U.S. tariffs work
A tariff is a tax on imported goods, paid to U.S. Customs and Border Protection (CBP) by the importer of record when goods enter the country. It is usually a percentage of the goods’ customs value (an ad valorem duty).
Every import starts with a Most-Favored-Nation (MFN) rate set by its classification in the Harmonized Tariff Schedule of the United States (HTSUS). On top of that base rate, the government can add special duties under trade laws. In 2026, two laws do most of that work: Section 232 and Section 301.
The 2026 tariff timeline
| Date | What happened |
|---|---|
| Feb. 20, 2026 | Supreme Court invalidates the IEEPA “reciprocal” tariffs |
| Feb. 24, 2026 | 10% global surcharge under Section 122 takes effect |
| April 6, 2026 | Section 232 metals overhaul: duties apply to full customs value |
| July 24, 2026 | Section 122 surcharge expires; Section 301 forced-labor tariffs take effect |
| July 31, 2026 | Section 232 pharma tariff applies to large companies |
| Sept. 29, 2026 | Section 232 pharma tariff applies to all importers |
| Nov. 10, 2026 | 178 Section 301 China exclusions expire unless extended |
For the latest dates, see our Tariff & Trade Deadline Tracker.
Section 232: product-based tariffs
Section 232 of the Trade Expansion Act of 1962 lets the president restrict imports that threaten national security. It is applied by product, not by country, although some partners negotiate lower rates.
As of October 2026, Section 232 duties cover steel, aluminum, copper, autos and parts, wood products, semiconductors, medium- and heavy-duty vehicles and patented pharmaceuticals.
Two changes in 2026 matter most to procurement teams:
- Metals on full value. Since April 6, 2026, steel, aluminum and copper duties apply to the full customs value of derivative products, not just their metal content. Rates are tiered at 50%, 25% and 15% depending on the product annex. Products with 15% or less metal by weight are excluded.
- Pharmaceuticals. A default 100% duty applies to patented drugs and their active ingredients, with lower rates for the EU, Japan, South Korea, Switzerland and the UK, and for companies with U.S. onshoring or pricing agreements. Generics are exempt for now. See our pharma tariff coverage.
Section 301: country-based tariffs
Section 301 of the Trade Act of 1974 lets the U.S. Trade Representative (USTR) respond to another country’s unfair trade practices. It is applied by country.
- China tariffs (since 2018). Duties of typically 25% on goods on Lists 1–3 remain in force. A shrinking set of product exclusions has protected some goods; the last 178 expire Nov. 10, 2026 unless USTR extends them.
- Forced-labor tariffs (since July 24, 2026). An additional 10% or 12.5% on imports from 60 economies, depending on whether a country has a forced-labor import ban. Section 232 goods, USMCA-qualifying goods and inputs used in U.S. manufacturing are among the exemptions. See what importers are paying.
What happened to IEEPA and Section 122
The International Emergency Economic Powers Act (IEEPA) was the basis for the broad “reciprocal” tariffs of 2025. The Supreme Court ruled on Feb. 20, 2026 that IEEPA does not authorize tariffs, and those duties ended. Refunds of the roughly $166 billion collected are being processed through CBP and the Court of International Trade.
The administration then used Section 122 of the Trade Act of 1974, which allows a temporary surcharge of up to 15% for 150 days. A 10% surcharge ran from Feb. 24 to July 24, 2026, and expired when Congress did not extend it.
How tariffs stack: a worked example
Duties are generally additive. Consider a $100,000 shipment of a Chinese-origin component with a 3% MFN rate, on Section 301 List 3, with no exclusion after Nov. 10:
| Layer | Rate | Duty |
|---|---|---|
| MFN (base) | 3% | $3,000 |
| Section 301 China | 25% | $25,000 |
| Section 301 forced labor | 12.5% | $12,500 |
| Total | 40.5% | $40,500 |
If the same part were sourced from Mexico and qualified under USMCA, the Section 301 layers would not apply. If it were a steel derivative, the Section 232 rate would apply and the forced-labor layer would not. This illustration is simplified; confirm your actual stack with a licensed customs broker.
What procurement teams should do
- Get classification right. The HTS code decides every layer. Audit your top 50 imported SKUs and get binding rulings where classification is unclear.
- Map origin, not just supplier. Country of origin is where goods are substantially transformed, not where they ship from. Request origin documentation from suppliers.
- Claim every exemption. USMCA qualification and the U.S.-manufacturing-input exemption are worth real money. Make sure your broker is claiming them.
- Write tariff clauses into contracts. Decide who absorbs new duties, how quickly price adjusts, and what happens if a duty is refunded.
- Model landed cost, not unit price. Compare suppliers on total landed cost including duty, freight and inventory carrying cost. Our Cost Pressure Monitor tracks the underlying price trends.
- Track the calendar. Effective dates and expirations move landed cost overnight. Treat them like contract renewal dates.
Questions procurement teams are asking
What is the difference between Section 232 and Section 301 tariffs?
Section 232 tariffs are imposed on specific products (such as steel, aluminum, copper, autos, semiconductors and patented pharmaceuticals) on national-security grounds and generally apply regardless of country, with negotiated reductions for some partners. Section 301 tariffs respond to a specific country's unfair trade practices, such as the long-standing duties on Chinese goods and the 2026 forced-labor action covering 60 economies.
Are the IEEPA tariffs still in effect?
No. The Supreme Court ruled on Feb. 20, 2026 that the administration exceeded its authority under IEEPA, invalidating the reciprocal tariffs. Refunds of duties already paid are being processed through U.S. Customs and Border Protection and the Court of International Trade.
What happens when the Section 301 China exclusions expire on Nov. 10, 2026?
Unless USTR extends them, the 178 remaining product exclusions lapse and entries filed from Nov. 10 owe the underlying Section 301 duty, typically 25% for goods on Lists 1 through 3. There is no grace period for goods already in transit.
How do tariffs stack on a single shipment?
Duties are generally additive. A Chinese-origin product can owe its normal MFN rate, plus Section 301 China duty, plus the 12.5% forced-labor duty. Goods covered by Section 232 are exempt from the forced-labor layer but pay the Section 232 rate instead. Always confirm the stack for your HTS code with a licensed customs broker.
Who pays a tariff, the buyer or the supplier?
The importer of record pays the duty to CBP. Whether that cost is passed to the buyer depends on the Incoterms and contract. Under DDP terms the supplier is the importer and carries the duty; under FOB or EXW the buyer usually does.
How we wrote this guide
This guide draws on 5 sources, listed below, and on our own reporting. It was last reviewed on October 12, 2026 and is updated when rules or market conditions change. It is general guidance, not legal or financial advice. See our editorial standards.
Sources
- USTR — USTR Extends Exclusions from China Section 301 Tariffs (Nov. 26, 2025)
- Holland & Knight — New Section 301 Forced-Labor Tariffs Imposed on 60 Countries
- Baker Donelson — Trump Overhauls Section 232 Tariffs
- Strix — The Section 122 Surcharge Ended July 24, 2026
- BDO — Update on CBP IEEPA Refund Progress
